A New Jersey man has pleaded guilty to failing to report $6.1 million that he had hidden in secret Swiss bank accounts.
Juergen Homann of Saddle River, N.J., pleaded guilty to failing to file a Report of Foreign Bank or Financial Accounts, or F-BAR form. The case is the latest in a string of prosecutions of former UBS clients. The Swiss bank agreed in August to hand over the names of 4,450 account holders to the Swiss government, which will in turn them over to the U.S. government (see UBS Agrees to Disclose 4,450 Account Holders). That is on top of the approximately 275 names that the bank disclosed in February as part of a deferred prosecution agreement with the Justice Department.
Earlier this week, the Swiss government signed a protocol to its tax treaty with the United States to allow for greater tax information exchange. As a result, the international Organization for Economic Cooperation and Development. has removed Switzerland from its list of tax haven countries. World leaders convening at the G-20 meeting in Pittsburgh on Friday are expected to approve tougher sanctions on tax haven countries.
In Homanns case, he appeared before Judge Stanley R. Chester in Newark, N.J., and accepted responsibility for concealing millions of dollars in Swiss bank accounts. According to court documents and statements made in court, Homann failed to file an F-BAR for calendar year 2007 and failed to report his account at UBS AG in Switzerland on his individual income tax return for that year as well as the income he earned on his UBS bank account.
The UBS account, originally opened in the late 1980s in the name of a Liechtenstein foundation, was transferred to the name of ELM Finance Limited, a nominee Hong Kong corporation. Homann established ELM with the assistance of Swiss lawyer Matthias Rickenbach, who was indicted last month for conspiring to defraud the United States. From 2001 through 2008, Homann held approximately $6.1 million in assets in the ELM account at UBS in Switzerland.
In 2005, Homann, with the help of Rickenbach and a Swiss banker, transferred $5 million to a second Hong Kong entity in order to obtain financing for his U.S. business without alerting authorities that he controlled the assets in the ELM account at UBS, according to prosecutors. Rickenbach and a Swiss banker persuaded Homann not to enter the IRSs voluntary disclosure program.
Sentencing is scheduled for Jan. 6. Homann faces up to five years in prison and a fine of $250,000 or higher. Homann has agreed to pay a civil F-BAR penalty based on 50 percent of the highest balance contained in the UBS account.
The IRS recently announced that it would extend the voluntary disclosure program for people who have failed to report on their offshore holdings until Oct. 15. As the IRS voluntary disclosure program enters its final few weeks, those who are hiding income and assets in offshore accounts would be well-advised to promptly come in and come clean before the government learns about their accounts through other channels, said John A DiCicco, Acting Assistant Attorney General of the Justice Departments Tax Division. Those who think they can stay below the radar face a real risk of prosecution and jail if convicted, and they will still owe the taxes due, together with interest and civil penalties.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access